Universities around the country provide much-needed support to budding entrepreneurs through incubator and accelerator programmes.
However, there is a gap between that initial funding and the startups going on to receive venture capital investment. That’s where Unifund comes in.
Founder Zack Dutton says Unifund is the next step in the startup journey, providing seed funding and bridging the gap between the college incubator and private equity investment.
Student talent is highly regarded in the corporate world, but undervalued in the startup scene, Mr Dutton says. Unifund’s mission is to have fledgling entrepreneurs use their talent to start a business, “instead of doing an internship in a bank”.
Unifund has linked up with the Trinity Entrepreneurial Society which Mr Dutton says is the largest entrepreneur society in Europe. Instead of launching a marketing campaign to generate leads, Unifund sponsors the society, so the money goes to the students, allowing the process to happen “organically”. Since setting up in March 2017, Unifund has had over 600 applications.
So far, Mr Dutton and his business partner David McGuinness have self-funded the company. Much of the capital comes from Mr Dutton’s other companies — record label Revive Records which he started at 16, and music promotions business Bad Apple. Unifund provides seed investment, taking equity from the startups that it supports.
Mr Dutton says this model has elicited some raised eyebrows in the startup scene, where the typical practice for college incubators is that investment is funded through sponsorship from corporate partners.
However, he says by taking equity they are showing they are taking companies seriously.
The businesses that Unifund invests in are at a “super-early stage”. Each case is different, and Unifund doesn’t impose set conditions.
"Every case is completely different. Of the businesses we’ve invested in to- date, some are revenue-generating, and some are just an idea; you can’t treat those two things the same way."
Unifund is running a three-month programme this summer for three startups as part of a partnership with Huckletree, a co-working space in Dublin and London.
The inaugural programme is full-time, and packages are tailored to the needs of the startup, with specific mentors for specific businesses. Funding and office space are also included.
While Unifund is “hands-off” about what the startups do with the money (“they can pay themselves a salary if they want”), Mr Dutton says that as investors Unifund is very involved.
“It’s going to be a very proactive programme, rather than a bunch of students sitting in a corner with whatever investment they get,” he says.
Though applications are now closed, Unifund is open all year to applications for general investment.
Unifund bases its investment decisions on the team’s experience working with the startups in the college incubators.
“It’s not that we see an application and say ‘yes’ or ‘no’, it’s a longer process than that,” he says, because the team is more important than the idea. “If you don’t trust the person, if you don’t think they can deliver, the business doesn’t have an opportunity at all,” according to Mr Dutton.
By the end of this month, Unifund will have invested in six startups. The diverse group includes Recroot, a video-based recruitment platform; Make A Mark which makes a sheep marking gun; Campus Advs, an on-campus advertising service for brands; and Applaud Events which simplifies the process of booking performers.
Unifund works with Trinity College-founded private equity consultancy business, One16 Partners, which connects student startups based in universities in the UK and Ireland with potential investors. One16 Partners has ambassadors at most university campuses in UK and Ireland.